Pros & Cons of Buying New Home vs Existing Home

When you are ready to Buy a property, you would have plenty options in front of you.  One of the important ones is, whether to buy a Brand New property or an Existing Home.  There are many pros and cons involved in both of them.  While the Brand New property gives you the peace of mind regarding the condition of the property, they come with the unique set of challenges of their own.  Following are some pros & cons of both New Homes and Old Homes.

Brand New Properties

Pros:

  1. Easy process: You basically select a model, make a deposit on a lot of your choice.  Then the builder would start building the property for you.
  2. Customization:  Depending at which stage of the construction, you could be able to choose the upgrades / options in the property.
  3. Loan for upgrades:  If you choose to upgrade the property through the builder, the cost involved is added to the Purchase Price.
  4. Low Down Payment:  Builders don’t mind if you make a low down payment because they have many properties to sell.
  5. Warranty:  All the new homes come with 10 year structural warranty.  If there any structural issues, the builder would cover you for 10 years.  Just raise a ticket and they would fix it for you quickly.
  6. Closing Costs Credit:  If you choose the Builder’s preferred lender for the loan, you could even get the Closing Cost credit from the builder.
  7.  Price Negotiations:  Yes, there are price neogtiations involved even on the new properties.  Do call us and setup an appointment to discuss.

Cons:

  1. Construction Delays:  Pretty much all the builders run into the construction delays because of the weather conditions, building permits etc.  Because of this you may not get the property into your hands on time.
  2. Lot Size:  Normally the lot sizes are smaller than the existing homes.
  3. Multi Story buildings:  Many brand new constructions you come across are Tri-Level homes, especially the ones close to the main city area.
  4. Schools:  Typically you would see the school ratings are low in these areas as there are not many people moved into the area yet.
  5. Mello Roos & HOA:  Many times you could be paying for Mello Roos.  And also they all come with monthly HOA fees.

Existing Homes

Pros:

  1. Schools:  Normally the schools ratings are high in these areas as the people have been living in the neighborhood for long time.
  2. Custom homes:  If it is a single family home with no HOA, you can re-build a new home according to your taste.
  3. Bigger lot sizes:  Usually they come with a bigger lot sizes.
  4. Upgrades: Typically they come with many latest upgrades since the existing owners normally do it for their convenience.  You are always allowed to change them according to your taste once you move-in.
  5. Price negotiations:  The price negotiations depend upon the location, upgrades & the comparables of the property.  Above all this, many times, we have lot of inside information which we use to help you get the property for a good price.

Cons:

  1. AS-IS:  Many times, the Sellers expect you to buy the property in the AS-IS condition.
  2. Free Rent Back:  Unless the property is currently vacant, the Sellers need some extra time to vacate the property after COE.  They expect the Buyers to offer free rent back for some period.
  3. Property Age:  Older properties do come with their own challenges based on the age of the property.  Your Realtor will get the property inspections scheduled and go over the Reports & Seller Disclosures, give you the summary and advise you on the next steps.